If you’re one of the many people who struggle with a disabling medical condition that makes it tough to hold down a job, you may be wondering about your disability options. If you have a long term disability policy through Principal, wonder no longer – here at Dell & Schaefer, we’ve handled hundreds of Principal Financial disability claims and can guide you through the ins and outs of the process and what you’ll need to do to recover disability insurance benefits. Like many insurers, Principal  Financial has some common patterns and practices that can be worked around once you’re familiar with them. Learn more about what you’ll need to prove to obtain disability benefits from Principal.

GREGORY DELL: Hi, I’m Greg Dell with Attorneys Dell and Schaefer, here with attorney Rachel Alters. And we’re going to discuss Principal Financial group long-term disability lawsuits. And Rachel this is a scenario that obviously comes about when a claimant has exhausted all of their appeals already.


GREGORY DELL: Or if they have a private disability policy, their claim has been denied and they’re ready to file a lawsuit. So there are two different types of claims. There’s the ERISA group policies, and there’s individual disability policies. And principal rights is a good mix of both of these. So let’s talk about, in this video, the expectations that someone should expect from both a group disability policy and a private policy. But first, let’s talk about the differences between a group policy and a private policy from the offset.

RACHEL ALTERS: OK, and you’re referring to just litigation?


Does the litigation of a Group Disability Policy governed by ERISA differ from a Private Policy?

RACHEL ALTERS: OK, so there are many differences between a group and private disability policy. The first would be a group disability policy is governed by ERISA. ERISA is a federal law. That’s the Employee Retirement Income Security Act. And the long and short of it is they have certain regulations and, with an a ERISA claim, you don’t get a jury trial.

So for litigation purposes with a group policy, you’re going to only have a bench trial with a judge, where there’s no witnesses, there’s no depositions, there’s no testimony. So basically, what the judge is doing is looking at the administrative record, which is the claim file, and deciding whether or not the insurance carrier principle was arbitrary or capricious in the denial of the claim.

If the judge finds that the insurance carrier was arbitrary and capricious, then they rule in favor of the claimant. The claimant can recover past benefits that they’re owed, possibly get attorneys fees, and then it gets remanded back to principle for another review. And that’s only with a group policy. That’s how that works.

GREGORY DELL: OK, and then the individual policy, how does it differ?

RACHEL ALTERS: It differs in such a way as you get a jury trial of your peers. So a lot of people will prefer that. Also, you can take depositions. There’s testimony. You can– you don’t have to rely solely on the administrative record. The administrative record doesn’t close at the time of the last decision.

So there’s a lot more options and benefits to having an IDI private policy than a group policy. You have more rights. You probably have more right to possibly more remedies, such as bad faith or punitive damages also. So I always tell my clients, yes, a group policy is good to have, but a private policy will always benefit you more.

GREGORY DELL: Right, and a private policy is probably five to six times the price of monthly premiums than a group policy, but people who have the group policies may not have necessarily bought an individual policy or even knew they could buy one.


What is the Timetable of a disability lawsuit against Principal Financial ?

GREGORY DELL: When it comes time to filing the lawsuit, whether it’s individual or group, the frames are going to be the same. Talk about what a person should expect for time frames in a lawsuit against principle.

RACHEL ALTERS: Well, once a lawsuit is filed– because usually, you want to make sure you get it filed in a timely manner because there’s something called the statute limitations.


RACHEL ALTERS: Usually, it’s not always this– depends on the contract. But usually, it’s three years from the date of proof of loss, depending on the state. Sometimes it’s one year, so your attorney that’s filing needs to pay close attention to the statute of limitations because you don’t want to blow that.


RACHEL ALTERS: If that gets blown, then you don’t have a claim anymore. So once the lawsuit is filed, then, usually it depends on the court. If it’s a federal court, it usually takes about a year to get to trial. Sometimes it’s shorter. Once the judge enters the order, there’ll be a mediation that’s required by law. So that the claimant will be required to show up for mediation to attempt to settle the claim.

If that’s not successful, then they can expect to go to trial. But again, in a group claim, the claimant isn’t actually going to the trial. It’s usually just the lawyer’s motion– the plaintiff’s lawyer versus the defendant’s lawyer’s motions, and the judge’s review, and then there’s a decision. Sometimes it’s oral argument, but mostly that’s not the case.

GREGORY DELL: So a lot of people have a misconception about what they get if they win the trial.


GREGORY DELL: It’s the same, I think, misconception that they have when they get approved for claims for benefits, that they think it’s going to last forever. But what do you actually win at trial?

RACHEL ALTERS: Right. And usually, with it with a group policy and a private policy, it’s usually the same unless there’s punitive damages involved. So in a breach of contract claim, you can only be awarded past benefits. The judge is not ever allowed to award future benefits, and the same applies to a group policy.

So if you win your case, you get whatever you’re owed to date or to the date the complaint was filed, and then anything in the future is determined by the insurance carrier once it’s remanded back to them to decide if you’re still disabled and deserve benefits. So you can win your trial, and then get another review from principal. And they can decide well we don’t think you’re disabled, and then you’re back doing the same thing again, appealing it and back and trial a year later. So that’s how it unfortunately works. You can’t be awarded the future benefits.

Does Principal Financial Settles Disability Lawsuits?

GREGORY DELL: How do these Principal Financial claims usually resolve once a lawsuit is filed?

RACHEL ALTERS: I would say– and I might be a little bit off, but 95% to 97% of them end up in a settlement– a lump sum settlement– because most people don’t want to be in that vicious cycle of I won the trial, got my past benefits, now I’m back getting reviewed with principle again. And then if they deny me, I have to go through the appeal process. And it’s very tedious.


RACHEL ALTERS: So a lot of people will say, I’d rather get a lump sum, be done with them, and move on my way.

GREGORY DELL: So talk about that lump sum. And I think that they usually end in a lump sum because– whether it’s principal, financial, or any other company– they dangle the carrot high enough for claimants, well, number one, because we’ve litigated against them so many times, they know that there’s a fair chance of winning or losing–


GREGORY DELL: –the claim on their side. So that’s going to help the claimant get a maximum value. But also, there’s a level of certainty for a claimant if they end up taking a settlement. And these claimants don’t have any income coming in because they’re unable to work.


GREGORY DELL: And that’s what they’re relying on this policy for. So when a claimant gets an offer that they think is reasonable and often may not be what they’re expecting– but they know that if they lose the trial, or the appeal, or whatever it may be, there’s not going to be a recovery. And that’s why I think these things resolve.

Also, Rachel, I think that a claimant has the opportunity– some people are like, maybe I could work or try something on my own terms, but this policy just doesn’t give me the opportunity to do that. So I’m kind of like– I’m house-locked. It’s almost like being on house arrest–


GREGORY DELL: –even though you can leave the house. And I can’t try anything. But if I get a settlement, they can do whatever they want at that point. It’s a full, complete release. The next day, you could start a new job and try to do whatever you think you can do and have several years worth of benefits prepaid for you. And then sometimes it gives some people a spark or an incentive to try to do something, as opposed to living in fear every day that the principal is going to cut them off and no longer pay them. So that’s a strength of taking a settlement in a lawsuit.


GREGORY DELL: There’s also this situation where we talked about what you could win, but if you lose, talk about this appeal process and how long that could take.

RACHEL ALTERS: Right. Well, if you lose in federal court, that means you’re not getting anything. You’re not getting your benefits. And the judge is saying, hey, we think principal was not arbitrary and capricious in the denial of your claim, that they had a reasonable basis to deny or claim, whether that was a peer review that they relied on, or they caught you on surveillance, or whatever that may be. So once that claim is is, that’s–

GREGORY DELL: But in terms of that lawsuit, if they lose at trial, what are their next remedies?

RACHEL ALTERS: Well, they can appeal to the next level of court.

GREGORY DELL: Right, and how long will that take?

RACHEL ALTERS: Oh, a long time. I mean, that could take an additional year plus. And once you do actually go to that trial, it takes a very long time for that court– the appellate court– to make a decision. And then once that decision is made, there is another level you can appeal, but it’s very costly. And most people don’t want to go through that.

GREGORY DELL: Right, so that’s a kind of– and even if you win, sometimes at the trial, the other side can appeal and tie up your money for another year. So that’s something we’ve been through and we fought through that process. But you’ve got to be a claimant who can has some reserves, or family support, or something to ride out that process.

And unfortunately, a lot of– we hate that it happens, but a lot of disability carriers strong arm claimants into settlements because they financially can’t pay their mortgages, or expenses, or whatever it may be. So that’s a very challenging process. Can you talk for a minute about how we charge and the litigation process to represent claimants?

RACHEL ALTERS: Yeah. Usually– most of the time– we charge on a contingency basis. So we get paid if and only if we recover for the claimant–


RACHEL ALTERS: –which is good for the claimant because there’s really no risk in them hiring us because they have nothing to lose. They don’t have to pay us, so we can work 100 hours on a claim and spend a few thousand dollars. And if we don’t win the case, we eat the costs and they don’t know anything.


RACHEL ALTERS: So for them, there’s no risk. And for us, there’s a big incentive to get the case either one or settled for a good amount because that’s how we get paid on the case.

GREGORY DELL: And in terms of when the clients hire us and there’s no risk for them whatsoever, we cover all the costs and everything for them, and then we continue to manage the claim on an ongoing basis if we were to win the lawsuit and they get back on claims. So that’s also a huge advantage for them.

So the best way– I mean, we’ve only scratched the surface. Because really, what we need to do, if your claim has been denied by principle, is to review a copy of your denial letter, review a copy of the policy. We have to really dig into the claim. We have to get a complete copy of the claim file– which, Rachel, as you know, could be 500 pages to 15,000 pages– and really, really take a look at what’s there.

We’re going to provide you with an initial free phone consultation. And within a matter of 15, 20 minutes– whether it’s Rachel or myself– we’re going to be able to tell you if we can help you, what it’s going to cost you, the time frames. Everything that you want to know we’re going to take the time to answer for you during that free initial call.

Now, all of our clients are located all over the country. We always provide this free initial consultation. We’re going to make it as easy as possible for you. We encourage you, if you’re looking for additional information, to watch some of the other videos on our YouTube channel, look through our website. We have lots of articles.

I know, Rachel, you’ve done tons of other videos about appeals, and filing lawsuits, and different medical conditions. So you can really gather a lot of information. But at the end of the day, we’d really like to discuss your claim with you. You can subscribe to our YouTube channel below and continue to get helpful videos to help protect your claim or give you tips to win your appeal, no matter what stage you’re at. And we appreciate you considering our law firm.

As you can see, navigating the long term disability claim process with Principal can be a challenge, and a single misstep or omitted document can be enough to torpedo your claim for benefits. It’s a good idea to have a knowledgeable long term disability insurance attorney on your side throughout this process, protecting your legal rights and ensuring you’re building the strongest disability claim possible. If you’re ready to get started, give Dell & Schaefer a call to discuss scheduling your FREE consultation with one of our experienced attorneys.